Judge rules state workers don’t have to pay for retiree health coverage

An Illinois 7th Circuit judge has ruled that the state cannot make deductions from state retirees’ pension checks for their retiree health insurance coverage. Based on this temporary injunction, state retirees no longer have to pay 1- 2 percent of their pension check for their retirement health-insurance coverage. Judge Steven Nardulli of the state’s 7th...

An Illinois 7th Circuit judge has ruled that the state cannot make deductions from state retirees’ pension checks for their retiree health insurance coverage. Based on this temporary injunction, state retirees no longer have to pay 1- 2 percent of their pension check for their retirement health-insurance coverage.

Judge Steven Nardulli of the state’s 7th Circuit granted a preliminary injunction to halt deductions for health-insurance premiums from retirees benefit checks.

Today’s injunction brings the state of Illinois one step closer to even more financial turmoil. Illinois already has a shortfall of more than $56 billion in retiree health-insurance debt for former state workers. The underlying fiscal problem with the state’s post-employment health benefits is that retired state workers pay very little for this generous benefit.

In fact, many state workers retire in their 50s with full health-insurance benefits and then supplemental coverage once they are eligible for Medicare – for a tiny fraction of the actual cost that Illinois taxpayers fund.

Not only is this system unfair to taxpayers who are footing the bill, but it also makes a mockery of what state employees might be entitled to upon retirement. While the preliminary injunction may have been an attempt to expedite the current court fight, the case is still working its way through the court system. Another hearing in the case is scheduled for November. (The Supreme Court ruling reversed Nardulli’s previous dismissal of the retirees’ original lawsuit.)

Judge Nardulli’s decision – instigated by the Supreme Court decision – is not only dangerous to the economic and fiscal health of the state, but it is also unfair to the Illinois taxpayers who are on the hook for lavish benefits that they themselves will not receive.